UNITED STATES
                 SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC 20549

                            FORM 10-KSB

               ANNUAL REPORT UNDER SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934

             FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007

                 Commission File Number: 001-14519

                  BALTIA AIR LINES, INC.
       (Exact name of registrant as specified in its charter)

   NEW YORK                         11-2989648
(State of Incorporation)          (IRS Employer Identification No.)

         63-25 SAUNDERS STREET, SUITE 7 I, REGO PARK, NY 11374
            (Address of principal executive offices)

Registrant's telephone number, including area code: (718) 275-5205

Securities Registered under Section 12(g) of the Exchange Act:

Common Stock - Par Value $.0001 Per Share

Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months
and (2) has been subject to such filing requirements for the past 90
days. [x] yes [ ] no

Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in part III of this Form 10-KSB or any amendment to this
Form 10-KSB. [x]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes [ ]  No [x]

Registrant's revenues for its fiscal year 2007: $-0-

The aggregate market value of the voting common equity held by
non-affiliates as of March 29, 2008 is $11,828,620.

As of April 11, 2008 there were 297,239,159 shares of common stock
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Item 13

3.1 Certificate of Incorporation of Baltia Air Lines, Inc.
(incorporated by reference to Exhibit 3.1 to Form 10-KSB filed on
May 19, 2005)

3.2 Bylaws of Baltia Air Lines, Inc. (incorporated by reference to
Exhibit 3.2 to Form S-8 filed on December 19, 2001).


Transitional Small Business Disclosure Format (Check one): Yes [  ]
No [X]


                               
<PAGE>
PART I

Item 1. Description of Business.

Baltia Air Lines, Inc. (the "Company" or "Baltia") was organized in
the State of New York on August 24, 1989.  Its objective is to
provide scheduled air transportation from the U.S. to Russia, and
former Soviet Union countries. In 1991, the Department of
Transportation (DOT) granted the Company routes to provide non-stop
passenger, cargo and mail service from JFK Airport in New York to
St. Petersburg and from JFK to Riga, with service to Minsk, Kiev
and Tbilisi, as well as back up service to Moscow.  Due to a lack
of sufficient working capital, the US Department of Transportation
terminated the Company's route authority without prejudice to
reapply when financing was in hand.  Since such time, Baltia has
engaged in market research, operations development and planning, as
well as activities to raise the requisite funding. These costs were
borne by Baltia's shareholders and principals.

Baltia now has raised the capital we believe enables us to commence
revenue flight operations from JFK to St. Petersburg. However, the
final determination lies with the US Department of Transportation
In October 2007 Baltia filed its application with the DOT to
provide service on this route. In the first quarter of 2008 Baltia
filed its application for FAA Air Carrier Certification. Baltia has
leased additional office space at terminal 4 of JFK. We have made
key operating arrangements at JFK and other service arrangements
are in the process of being made. Baltia staff is now finalizing
air carrier manual system for submission to the FAA. We have
contracted two professional aviation consultants, Aviation Content
Management LLC and Professional Aviation Consulting Group LLC (FAA
approved consultant) to review our manuals for regulatory
compliance in order to expedite the certification process.

Baltia intends to provide full service, i.e. passenger, cargo and
mail, and will not be dependent upon one or a few major customers.
Baltia has two registered trademarks "BALTIA" and "VOYAGER CLASS"
and five trademarks are subject to registration.

There is currently no non-stop service from JFK to St. Petersburg.
Connecting service is provided mainly by foreign carriers. Finnair,
Lufthansa and SAS are the leading competitors in the US-Russia
market. KLM, British Airways, Air France, Austrian Airlines, and
Swissair also provide service. However, foreign carriers are
required to have intermediate stops at transit airports in their
respective countries (Helsinki, Frankfurt, Stockholm, Copenhagen,
etc.) because they are "third nation" airlines and as such cannot
fly directly between the US and Russia (only a US airline as well
as a reciprocating Russian airline is eligible to fly nonstop).
Delta and Aeroflot currently operate between JFK and Moscow. With
the exception of the JFK-Moscow route, there exists no non-stop
competitive air transportation service on the routes for which
Baltia can reapply.

Baltia's objective is to establish itself as the leading non-stop
carrier in the market niche over the North Atlantic with operations
that are profitable and growing over time. In order to accomplish
this objective, we intend to establish and maintain high quality
service standards which we believe will be competitive with the
European airlines currently providing connecting flights.  Baltia
does not expect to be in direct competition with deep discount
airlines, including several East European airlines and the
offspring of the former Soviet airline Aeroflot, which provide
connecting flights.

Baltia intends to provide First, Business, and Voyager Class
accommodations.  Baltia's passenger market strategy is tailored to
particular preferences of the various segments of its customer
base, with marketing attention particularly focused on American
business travelers with interests in Russia who require high
quality, non-stop service from the US to Russia.

Baltia's initial marketing strategy is based on existing agencies
specializing in the market, selected travel and business
publications, supplemented by direct mailings to corporate travel
planners, and individual American businesses that are currently
involved in Russia. Soon after the inauguration of flight service,
Baltia plans to implement its frequent flyer program. As the
marketing matures, Baltia plans to advertise to the general public
throughout the US, and in Russia.  Baltia also plans to sponsor
selected industry and trade events in the US and in St. Petersburg.


Baltia intends to provide customer service and reservations centers
in New York and in St. Petersburg, to list Baltia's schedules and
tariffs in the Official Airline Guide, and provide world-wide
access to reservations on Baltia's flights through a major Computer
Reservations and Ticketing System ("CRS").

The Company intends to activate its reservations service when the
DOT issues its order authorizing Baltia to sell tickets (expected
to be approximately 30 to 45 days before the inaugural flight).

Baltia has identified the following market segments in the U.S.-
Russia market: (i) Business Travelers, (ii) General Tourism, (iii)
Ethnic Travelers, (iv) Special Interest Groups, (v) Professional
Exchanges, and (vi) Government and Diplomatic Travel.

Baltia believes that the direct non-stop service to be offered by
it will be superior to the stop-over service currently offered by
foreign airlines.   A comparison between the two services with
respect to passenger convenience and cargo transport efficiency is
set forth below.

BALTIA - US flag, non-stop service:

With non-stop service, a passenger can fly from JFK to St.
Petersburg in about than 8 hours in a Boeing B747 wide body
airplane. Cargo arrives containerized, palletized, and secure.

Foreign, stop-over journeys:

With stop-over service, it would take a passenger 10 to 18 hours to
fly through Helsinki, Copenhagen, Moscow, or Frankfurt on a foreign
carrier. In addition, passengers must change to narrow-body
aircraft at a layover airport. Cargo is "broken up" and manually
loaded onto narrow-body aircraft, or trucked from Helsinki.

Baltia plans to operate efficiently and provide consistent high
quality service to passengers and cargo shippers alike in order to
establish the Company as the preferred airline in the market in
comparison to its competitors. The Company also plans to use
targeted marketing of its service to maintain and grow its market
share.

Because of the increased reliability and comfort of a non-stop
flight, Baltia expects to capture a portion of the existing
traffic.  Further, US government traffic is required by law (Fly
America Act) to fly on a US Flag carrier when service is available.

With the Boeing 747 true wide-body aircraft Baltia intends to
provide cargo service from JFK to St. Petersburg, offering
containers, pallets, and block space arrangements. Baltia expects
to carry contract cargo for express shippers.  Baltia also plans to
market its own "Baltia Courier", "Baltia Express", and "Baltia
Priority" express service for letters and packages.  Baltia also
expects revenues from diplomatic mail and cargo, under the Fly
America Act provision.

Baltia has prepared passenger service and ground service
arrangements at JFK, and similar services are available at Pulkovo
Airport in St. Petersburg, based on recent contact. As a US carrier
flying into a foreign country, Baltia will be eligible to the same
degree of priority that a foreign carrier receives when arriving in
the US.

Baltia intends to start the JFK-St. Petersburg service with one
round-trip flight per week, then increase the frequency to three
round trips, and then to five round trips, within a four-month
period.

By starting with one roundtrip flight per week, then increase the
frequency subject to market conditions, Baltia not only accelerates
and simplifies its FAA Certification, but expects to save itself
the additional time it would incur to make needed improvements and
corrections. Starting with a light schedule, any inefficiencies of
a given flight may be corrected for the next flight.  Baltia
management believes that by starting with one weekly round trip,
the Company will attain high operating efficiencies and service
standards. These standards may be further refined when Baltia plans
to increase service.   Eventually, Baltia plans to increase service
to five round trips per week, and then subsequently to daily round
trip flights as additional aircraft are brought into service.  The
transitional schedule allows Baltia to train additional pilots,
flight attendants, and support staff with a continuous training
program. It also allows Baltia marketing program to take effect
through its various segments.

During the past two years Baltia has also been preparing standards
for service. The care taken in establishing high standards has
implications beyond the launching of the JFK-St. Petersburg flight.
Baltia plans to build operating modules and apply that know-how to
develop new markets. Once established, Baltia plans to duplicate
its JFK-St. Petersburg standards on flights on other transatlantic
routes. By the end of year one, Baltia plans to introduce three
additional aircraft.

Additional revenues from charter flying. In conjunction with its
Part 121 air carrier certification ("Part 121"), (referring to a
Federal Aviation Regulations' number, is an industry acronym used
to describe a US airline operating heavy jet aircraft) for
scheduled service, Baltia intends to seek certification for world
wide charter service. Following certification, Baltia plans to
utilize aircraft time available between scheduled service, to earn
additional revenues from charters. We are also considering
qualifying our aircraft for military contracts.

In order to start revenue flight operations, the Company has to
complete FAA Air Carrier Certification. During the past two years
the Company has been preparing for air carrier certification. The
Company's staff has prior experience with the certification and is
familiar with the latest System Safety & Certification Process
procedures (CPD 8.0), and the Air Transportation Oversight System
(ATOS) requirements.

The Company will carry airline liability insurance as required for
a US airline by DOT regulation.

As of December 31, 2007, Baltia had eight full-time employees and
twelve part-time employees. Baltia's staff includes professionals
who have extensive major US airline experience in aircraft
maintenance, airline operations, airline regulatory compliance and
administration.

Item 2.  Description of Property.

The Company's property consists of office equipment and operations
manuals.
The Company rents space for its headquarters at 63-25 Saunders
Street, Suite 7I, Rego Park, New York 11374, leases operations
space at Concourse A, Terminal 4, JFK International Airport, and
leases office space in Manhattan at monthly rents of $1,237 and
$2,010, and $2,060 respectively.  The Company believes its property
is adequate to launch its services and the Company expects to
increase space within the first few months of operations.

Baltia has two registered trademarks "BALTIA" and "VOYAGER CLASS",
registered in Jan 7, 1992 and Jan 26, 1993, respectively.


Item 3. Legal Proceedings

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

PART II.

Item 5.  Market for Common Equity, Related Stockholder Matters and
Small Business Issuer Purchases of Equity Securities.

The following table sets forth the high and low sales prices, as
quoted by the OTCBB, for our common stock on the final day for each
quarter during our two most recent fiscal years ended December 31,
2006 and 2007. These quotations reflect inter-dealers prices,
without retail mark-ups, mark-downs or commissions, and may not
represent actual transactions.



      Fiscal Quarter Ended         High       Low
--------------------------- --------------- ----------------
        March 31, 2006             .07       .07
         June 30, 2006             .06       .06
    September 30, 2006             .03       .03
     December 31, 2006             .02       .02

        March 31, 2007             .03       .02

         June 30, 2007             .04       .03

    September 30, 2007             .08       .07

     December 31, 2007             .09       .08




The Company currently estimates that there are approximately 800
holders of record of its common stock. Given its continuing need to
retain any earnings to fund its future operations and desired
growth, the Company has not declared or paid, nor does it currently
anticipate declaring or paying for the foreseeable future, any
dividends on the Company's common stock.

The Company currently has no equity compensation plans, no written
purchase, savings, option, bonus, appreciation, profit sharing,
thrift, incentive, pension or similar plan or written compensation
contracts.

Item 6.  Management's Discussion and Analysis or Plan of Operation.

The following discussion includes certain forward-looking
statements within the meaning of the safe harbor protections of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Statements
that include words such as "believe," "expect," "should," intend,"
"may," "anticipate," "likely," "contingent," "could," "may," or
other future-oriented statements, are forward-looking statements.
Such forward-looking statements include, but are not limited to,
statements regarding our business plans, strategies and objectives,
and, in particular, statements referring to our expectations
regarding our ability to continue as a going concern, generate
increased market awareness of, and demand for, our service, realize
profitability and positive cash flow, and timely obtain required
financing. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ from
anticipated results. The forward-looking statements are based on
our current expectations and what we believe are reasonable
assumptions given our knowledge of the markets; however, our actual
performance, results and achievements could differ materially from
those expressed in, or implied by, these forward-looking
statements.

Our fiscal year ends on December 31. References to a fiscal year
refer to the calendar year in which such fiscal year ends.

OVERVIEW

The Company was organized in the State of New York on August 24,
1989.  Its objective is to provide scheduled air transportation
from the U.S. to Russia, and former Soviet Union countries. In
1991, the Department of Transportation (DOT) granted the Company
routes to provide non-stop passenger, cargo and mail service from
JFK to St. Petersburg and from JFK to Riga, with online service to
Minsk, Kiev and Tbilisi as well as back up service to Moscow.  For
lack of sufficient working capital, the US Department of
Transportation terminated the Company's route authority without
prejudice to reapply when financing was in hand.  Since such time,
Baltia has engaged in market research, operations development and
planning, as well as activities to raise requisite funding. These
costs were borne by Baltia shareholders and principals.

With the exception of the JFK - Moscow route, there exists no non-
stop competitive air transportation service on the routes for which
Baltia can reapply pending financing. In October 2007 Baltia filed
with the DOT for non-stop service from JKF to St. Petersburg,
Russia. Baltia intends to supply full service, i.e. passenger,
cargo and mail, and will not be dependent upon one or a few major
customers. Baltia has two registered trademarks "BALTIA" and
"VOYAGER CLASS" and five trademarks subject to registration.

The accompanying consolidated financial statements have been
prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business.  The Company has capital which
management believes is sufficient to start revenue operations on
the JFK-St. Petersburg route.  The Company's operational success
may be dependent upon its timely procuring significant external
debt and/or equity financing to fund its immediate and nearer-term
operations, and subsequently realizing operating cash flows from
ticket sales sufficient to sustain its longer-term operations and
growth initiatives.

PLAN OF OPERATION

We believe that we have  sufficient capital to commence revenue
flight operations. However, the final determination lies with the
U.S. Department of Transportation. During 2007 and into 2008 we
continued to finance our operations through the issuance of our
common stock. Until revenue operations begin, our monthly
expenditures for administrative and regulatory compliance can be
controlled at about $30,000-$50,000. Based on current reserves we
have sufficient capital to support our development stage operations
through the end of 2008.

In 2008 we plan to raise $1 to $2 mm in additional financing in
order to support revenue flight operations. Based on our prior
experience with certification and current preparations management
believes that the launch budget will be adequate to complete
certification and to commence flight service. Approximately
$1,000,000 is budgeted for aircraft, $450,000 for certification
tasks, and $300,000 for general and administrative expenses. At the
time flight service is inaugurated the Company plans to have
approximately 15 management and 45 staff personnel.

Management has considered the overall pipeline effect that enhances
the initial cash position of a startup carrier. It is the industry
practice for passengers to purchase tickets in advance of their
flights while many service vendors bill the carrier later.

In order that a new airline would not fly empty on day one,
approximately 30 days prior to the expected inaugural date the
Company expects the DOT to authorizes sales of tickets and cargo.
Such funds from advance sales, estimated at approximately $3 mm for
the company, accumulate in an escrow account, and are released upon
the issuance of the air carrier certificate.

There can be no assurance that additional financing will be
available on terms favorable to us or at all. If adequate funds are
not available or are not available
on acceptable terms, we may not be able to fund operations.


<PAGE>
CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results
of operations
are based upon our financial statements, which have been prepared
in accordance with accounting principles generally accepted in the
U.S. The preparation of our financial statements requires us to
make certain estimates, judgments and assumptions
that affect the reported amounts of assets and liabilities at the
date of the consolidated financial statements and the reported
amounts of revenues and expenses during the reporting period. Our
estimates, judgments and assumptions are continually re-evaluated
based upon available information and experience. Because of the use
of estimates inherent in the financial reporting process, actual
results could differ from those estimates. Areas in which
significant judgment and estimates are used include, but are not
limited to valuation of long lives assets and deferred income
taxes.

Valuation of Long-Lived Assets:  We review the recoverability of
our long-lived assets, including buildings, equipment and
intangible assets, when events or changes in circumstances occur
that indicate that the carrying value of the asset may not be
recoverable. The assessment of possible impairment is based on our
ability to recover the carrying value of the asset from the
expected future pre-tax cash flows (undiscounted and without
interest charges) of the related operations. If these cash flows
are less than the carrying value of such asset, an impairment loss
is recognized for the difference between estimated fair value and
carrying value. Our primary measure of fair value is based on
discounted cash flows. The measurement of impairment requires
management to make estimates of these cash flows related to long-
lived assets, as well as other fair value determinations.

We amortize the costs of other intangibles (excluding goodwill)
over their estimated useful lives unless such lives are deemed
indefinite. Amortizable intangible assets are tested for impairment
based on undiscounted cash flows and, if impaired, written down to
fair value based on either discounted cash flows or appraised
values.  Intangible assets with indefinite lives are tested for
impairment, at least annually, and written down to fair value as
required.

Stock-Based Compensation Plans: Stock-based awards to non-employees
are accounted for using the fair value method in accordance with
SFAS No. 123(R), Accounting for Stock-Based Compensation, and EITF
Issue No. 96-18, Accounting for Equity Instruments that are Issued
to Other Than Employees for Acquiring, or in Conjunction with
Selling Goods or Services.

On January 1, 2006, we adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") 123R, "Share-Based Payment"
("SFAS 123(R)"), which requires that companies measure and
recognize compensation expense at an amount equal to the fair value
of share-based payments granted under compensation arrangements.
Prior to January 1, 2006, we accounted for our stock-based
compensation plans under the recognition and measurement principles
of Accounting Principles Board ("APB") Opinion 25, "Accounting for
Stock Issued to Employees," and related interpretations, and would
typically recognize no compensation expense for stock option grants
if options granted had an exercise price equal to the market value
of the underlying common stock on the date of grant.

We adopted SFAS 123(R) using the "modified prospective" method,
which results in no restatement of prior period amounts. Under this
method, the provisions of SFAS 123(R) apply to all awards granted
or modified after the date of adoption. In addition, compensation
expense must be recognized for any unvested stock option awards
outstanding as of the date of adoption on a straight-line basis
over the remaining vesting period. We calculate the fair value of
options using a Black-Scholes option pricing model. We do not
currently have any outstanding options subject to future vesting
for which expense has not been recognized. SFAS 123(R) also
requires the benefits of tax deductions in excess of recognized
compensation expense to be reported in the Statement of Cash Flows
as a financing cash inflow rather than an operating cash inflow. In
addition, SFAS 123(R) required a modification to the Company's
calculation of the dilutive effect of stock option awards on
earnings per share. For companies that adopt SFAS 123(R) using the
"modified prospective" method, disclosure of pro forma information
for periods prior to adoption must continue to be made. In
computing fair value we used the following assumptions (no
instruments were issued in 2007):


Year Interest Rate Dividend Yield Expected Volatility Expected Life in Years


2006  5.15%     0.00%   75.00%       5


2007  4.40%     0.00%  150.00%       10


Income Taxes: We must make certain estimates and judgments in
determining income tax expense for financial statement purposes.
These estimates and judgments occur in the calculation of certain
tax assets and liabilities, which arise from differences in the
timing of recognition of revenue and expense for tax and financial
statement purposes.

Deferred income taxes are recorded in accordance with SFAS No. 109,
"Accounting for Income Taxes," or SFAS 109. Under SFAS No. 109,
deferred tax assets and liabilities are determined based on the
differences between financial reporting and the tax basis of assets
and liabilities using the tax rates and laws in effect when the
differences are expected to reverse. SFAS 109 provides for the
recognition of deferred tax assets if realization of such assets is
more likely than not to occur. Realization of our net deferred tax
assets is dependent upon our generating sufficient taxable income
in future years in appropriate tax jurisdictions to realize benefit
from the reversal of temporary differences and from net operating
loss, or NOL, carryforwards.

We have determined it more likely than not that these timing
differences will not materialize and have provided a valuation
allowance against substantially all of our net deferred tax asset.
Management will continue to evaluate the realizability of the
deferred tax asset and its related valuation allowance. If our
assessment of the deferred tax assets or the corresponding
valuation allowance were to change, we would record the related
adjustment to income during the period in which we make the
determination. Our tax rate may also vary based on our results and
the mix of income or loss in domestic and foreign tax jurisdictions
in which we operate.

In addition, the calculation of our tax liabilities involves
dealing with uncertainties in the application of complex tax
regulations. We recognize liabilities for anticipated tax audit
issues in the U.S. and other tax jurisdictions based on our
estimate of whether, and to the extent to which, additional taxes
will be due. If we ultimately determine that payment of these
amounts is unnecessary, we will reverse the liability and recognize
a tax benefit during the period in which we determine that the
liability is no longer necessary. We will record an additional
charge in our provision for taxes in the period in which we
determine that the recorded tax liability is less than we expect
the ultimate assessment to be.

RESULTS OF OPERATIONS

We had no revenues during the fiscal years ended December 31, 2007
and 2006 because we do not fly any aircraft and cannot sell
tickets.

Our general and administrative expenses increased $2,497,375 to
$3,705,673 during fiscal year ended December 31, 2007 as compared
to $1,208,298 during the fiscal year ended December 31, 2006. This
increase is mainly the result of increased activity in preparing
for air carrier certification.

Primarily as a result of the foregoing, we incurred a net loss of
$3,760,743 during the fiscal year ended December 31, 2007 as
compared to a net loss of $1,208,680 during the fiscal year ended
December 31, 2006.

Our future ability to achieve profitability in any given future
fiscal period remains highly contingent upon us beginning flight
operations. Our ability to realize revenue from flight operations
in any given future fiscal period remains highly contingent upon us
obtaining significant equity infusions and/or long-term debt
financing sufficient to fund leasing and operating a Boeing 747.
Even if we were to be successful in procuring such funding, there
can be no assurance that we will be successful in commencing
revenue operations or, if commenced, that such operations would be
profitable.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have incurred substantial operating and net
losses, as well as negative operating cash flows. As of December
31, 2007, we had cash of $2,002,496 and our stockholders' equity
was $2,007,812. This reflects an increase from December 31, 2006
when our cash was $4,185 and our stockholders' equity was $5,514.

Our operating activities utilized $600,759 in cash during the
fiscal year ended December 31, 2007, an increase of $479,588 from
the $121,171 in cash utilized during the fiscal year ended December
31, 2006.

Our financing activities provided $2,610,056 and $111,209 in cash
during the fiscal year ended December 31, 2007 and 2006,
respectively.

We had no significant planned capital expenditures, budgeted or
otherwise, as of December 31, 2007.

Off-Balance Sheet Arrangements: We do not have any off-balance
sheet arrangements which have, or are reasonably likely to have,
an effect on our financial condition, financial statements,
revenues or expenses.

<PAGE>
Item 7. Financial Statements.

BALTIA AIR LINES, INC.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Michael F. Cronin
Certified Public Accountant
687 Lee Road
Rochester, NY 14606

Board of Directors and Shareholders
Baltia Air Lines, Inc.
New York, NY

I have audited the accompanying balance sheet of Baltia Air Lines,
Inc. (the "Company") as of December 31, 2007 and December 31, 2006
and the related statements of operations, stockholders' equity and
cash flows for the years then ended. The financial statements are
the responsibility of the directors. My responsibility is to
express an opinion on these financial statements based on my
audits.

I conducted my audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that I plan and perform the audits to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The company is not required to have,
nor was I engaged to perform, an audit of its internal control over
financial reporting. My audit included consideration of internal
control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, I
express no such opinion. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. I believe that my audits provide a reasonable basis
for my opinion.

In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Baltia
Air Lines, Inc.  as of December 31, 2007 and December 31, 2006 and
the results of its operations, its cash flows and changes in
stockholders' equity for the years then ended in conformity with
accounting principles generally accepted in the United States.

The Company has incurred operating losses since inception.  Note 8
of the financial statements addresses Management's Plan regarding
the future operations of the Company.

March 29, 2008

/s/ Michael F. Cronin





Michael F. Cronin


Certified Public
Accountant


<PAGE>
<TABLE>
<CAPTION>
          
<PAGE>
 Baltia Air Lines, Inc.
 Balance Sheets
 (A Development Stage Company)

                                              12/31/2007     12/31/2006
           Assets
<S>                                         <C>            <C>
Current Assets
Cash                                         $  2,002,496    $ 4,185

Property & Equipment:
Equipment                                         115,067     63,264
Accumulated Depreciation                          (65,383)   (60,735)
  Net Property & Equipment                         49,684      2,529

Total Assets                                 $  2,052,180    $ 6,714

Liabilities & Equity

Current Liabilities:
Accounts Payable                                $  25,000    $ 1,200
Current portion of long-term debt                   7,000          0
  Total current liabilities                        32,000      1,200

Long-term debt                                     12,368          0

Equity:
Preferred stock - 2,000,000
  authorized $0.01 par value
  66,500 issued & outstanding                         665        665

Common Stock - 500,000,000
  authorized $0.0001 par value
  279,450,534 issued & outstanding
  (122,394,909 in 2006)                            27,945     12,239

Additional paid in capital                     16,233,527 10,486,192

Deficit Accumulated During
  Development Stage                          (14,254,325)(10,493,582)

Total Equity                                 $  2,007,812    $ 5,514

Total Liabilities & Equity                   $  2,052,180    $ 6,714

See Summary of Significant Accounting Policies and Notes to
FinancialStatements.
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
Baltia Air Lines, Inc.
Statements of Operations
(A Development Stage Company)

                                                   Years Ended            Inception to
                                            12/31/2007     12/31/2006       12/31/2007
<S>                                     <C>               <C>              <C>
Revenue                                  $            0    $          0     $          0

Costs & Expenses
 General & administrative                     3,705,673       1,208,298       11,824,525
 FAA certification costs                         48,476               0          255,109
 Training                                             0               0          225,637
 Depreciation                                     4,648             382          311,056
 Other                                                0               0          568,245
 Interest                                         1,946               0        1,068,605
   Total Costs & Expenses                     3,760,743       1,208,680       14,253,177

Loss before income taxes                     (3,760,743)     (1,208,680)     (14,253,177)

Income Taxes                                          0               0            1,148

Deficit Accumulated During
        Development Stage                 $  (3,760,743)   $ (1,208,680)    $(14,254,325)

Per share amounts:
Basic:
  Loss                                           ($0.02)         ($0.01)
  Weighted Average                          185,713,584      86,475,527

See Summary of Significant Accounting Policies and Notes to Financial Statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
<PAGE>
Baltia Air Lines, Inc.
Statements of Cash Flows
(A Development Stage Company)

                                                              Years Ended
Inception to
                                                         12/31/2007     12/31/2006
12/31/2007
<S>                                                     <C>            <C>            <C>
Cash flows from operating activities:
Deficit Accumulated During Development Stage             $(3,760,743)  $(1,208,680)    $(14,254,325)
Adjustments required to reconcile deficit accumulated
  during development stage to cash used in operating
  activities:
Depreciation                                                   4,648           382          311,056
Expenses paid by issuance of common stock                  3,131,536     1,087,127        4,872,287
(Increase) decrease in prepaid expenses                            0             0
400,301


Increase (decrease) in accounts payable & accrued expenses    23,800             0        3,176,481
   Cash flows used by operating activities:                 (600,759)     (121,171)      (5,494,200)

Cash flows from investing activities:
Purchase of equipment                                        (10,986)         (800)        (323,125)
   Cash used in investing activities                         (10,986)         (800)        (323,125)

Cash flows from financing activities:
Proceeds from issuance of common stock                     2,631,504       111,209        7,355,933
Proceeds from issuance of preferred stock                          0             0            2,753
Loans from related parties                                         0             0        1,351,573
Repayment of related party loans                                   0             0         (368,890)
Principal payments on long-term debt                         (21,448)            0          (21,448)
Acquisition of treasury stock                                      0             0
(500,100)
 Cash generated by financing activities                    2,610,056       111,209        7,819,821

Change in cash                                             1,998,311       (10,762)       2,002,496
Cash-beginning of period                                       4,185        14,947                0
Cash-end of period                                       $ 2,002,496     $   4,185    $   2,002,496

See Summary of Significant Accounting Policies and Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<PAGE>
Baltia Air Lines, Inc.
Statement of Shareholders' Equity
(A Development Stage Company)
                                            Preferred                       Common
   Deficit
 Accumulated
                                                                         Common  Additional
   During
                                                Par                      Stock     Paid-In
 Development
                                      Shares   Value        Shares       Amount    Capital
    Stage
<S>                               <C>       <C>      <C>           <C>        <C>             <C>
Balance at December 31, 2005          66,500    $665   67,298,009    $6,730     $9,293,365     (9,284,902)

Exercise of Warrants and Options                       22,000,000     2,200          9,000
Shares issued for cash                                 13,550,000     1,355         98,655
Shares issued for services                             19,546,900     1,955        941,213
Options issued for services                                                        143,959
Net Loss
  (1,208,680)
Balance at December 31, 2006          66,500     665  122,394,909    12,240     10,486,192
 (10,493,582)

Exercise of Warrants and Options                       58,000,000     5,800        239,700
Shares issued for cash                                 60,670,637     6,067      2,450,488
Shares issued for services                             38,384,988     3,838      3,021,429
Options issued for services                                                         35,768
Net Loss                                                                                     (3,760,743)
Balance at December 31, 2007          66,500     665  279,450,534    27,945     16,233,577  (14,254,325)

See Summary of Significant Accounting Policies and Notes to Financial Statements
</TABLE>


<PAGE>
BALTIA AIR LINES, INC.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DECEMBER 31, 2007

Basis of Presentation: The financial statements have been presented
in a "development stage" format. Since inception, our primary
activities have been raising of capital, obtaining financing and of
obtaining route authority and approval from the DOT and the FAA. We
have not commenced our principal revenue producing activities.

Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires
our management to make estimates and assumptions that affect
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statement and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from the
estimates.

Cash and Cash Equivalents: For financial statement presentation
purposes, we consider those short-term, highly liquid investments
with original maturities of three months or less to be cash or cash
equivalents.

Fair Value of Financial Instruments: Statements of Financial
Accounting Standards No. 107, "Disclosures about Fair Value of
Financial Instruments," requires disclosure of fair value
information about financial instruments. Fair value estimates
discussed herein are based upon certain market assumptions and
pertinent information available to management as of December 31,
2007. The respective carrying value of certain on-balance sheet
financial instruments approximated their fair values.

These financial instruments include cash and cash equivalents,
accounts payable and accrued expenses. Fair values were assumed to
approximate carrying values for these financial instruments since
they are short-term in nature and their carrying amounts
approximate fair values or they are receivable or payable on
demand. The carrying value approximates the fair value of the notes
payable

Property and Equipment: Property and equipment are recorded at
cost. Depreciation is computed using the straight-line method over
the estimated useful lives of the assets, generally 5-7 years.
Expenditures for renewals and betterments are capitalized.
Expenditures for minor items, repairs and maintenance are charged
to operations as incurred. Gain or loss upon sale or retirement due
to obsolescence is reflected in the operating results in the period
the event takes place.

Valuation of Long-Lived Assets: We review the recoverability of our
long-lived assets, including buildings, equipment and intangible
assets, when events or changes in circumstances occur that indicate
that the carrying value of the asset may not be recoverable. The
assessment of possible impairment is based on our ability to
recover the carrying value of the asset from the expected future
pre-tax cash flows (undiscounted and without interest charges) of
the related operations. If these cash flows are less than the
carrying value of such asset, an impairment loss is recognized for
the difference between estimated fair value and carrying value. Our
primary measure of fair value is based on discounted cash flows.
The measurement of impairment requires management to make estimates
of these cash flows related to long-lived assets, as well as other
fair value determinations.

We amortize the costs of other intangibles (excluding goodwill)
over their estimated useful lives unless such lives are deemed
indefinite. Amortizable intangible assets are tested for impairment
based on undiscounted cash flows and, if impaired, written down to
fair value based on either discounted cash flows or appraised
values.  Intangible assets with indefinite lives are tested for
impairment, at least annually, and written down to fair value as
required.

Comprehensive Income: Comprehensive income is defined as changes in
the equity of an enterprise except those resulting from shareholder
transactions. The amounts shown on our consolidated statement of
stockholders' equity relate to the cumulative effect of minimum
pension liabilities, translation adjustments, and unrealized gain
or loss on securities.

Stock-Based Compensation Plans: Stock-based awards to non-employees
are accounted for using the fair value method in accordance with
SFAS No. 123(R), Accounting for Stock-Based Compensation, and EITF
Issue No. 96-18, Accounting for Equity Instruments that are Issued
to Other Than Employees for Acquiring, or in Conjunction with
Selling Goods or Services.

On January 1, 2006, we adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") 123R, "Share-Based Payment"
("SFAS 123(R)"), which requires that companies measure and
recognize compensation expense at an amount equal to the fair value
of share-based payments granted under compensation arrangements.
Prior to January 1, 2006, we accounted for our stock-based
compensation plans under the recognition and measurement principles
of Accounting Principles Board ("APB") Opinion 25, "Accounting for
Stock Issued to Employees," and related interpretations, and would
typically recognize no compensation expense for stock option grants
if options granted had an exercise price equal to the market value
of the underlying common stock on the date of grant.

We adopted SFAS 123(R) using the "modified prospective" method,
which results in no restatement of prior period amounts. Under this
method, the provisions of SFAS 123(R) apply to all awards granted
or modified after the date of adoption. In addition, compensation
expense must be recognized for any unvested stock option awards
outstanding as of the date of adoption on a straight-line basis
over the remaining vesting period. We calculate the fair value of
options using a Black-Scholes option pricing model. We do not
currently have any outstanding options subject to future vesting
for which expense has not been recognized. SFAS 123(R) also
requires the benefits of tax deductions in excess of recognized
compensation expense to be reported in the Statement of Cash Flows
as a financing cash inflow rather than an operating cash inflow. In
addition, SFAS 123(R) required a modification to the Company's
calculation of the dilutive effect of stock option awards on
earnings per share. For companies that adopt SFAS 123(R) using the
"modified prospective" method, disclosure of pro forma information
for periods prior to adoption must continue to be made. In
computing fair value we used the following assumptions (no
instruments were issued in 2007):

Year   Interest  Dividend    Expected    Expected Life
         Rate    Yield      Volatility   in Years

2006    5.15%     0.00%        75.00%       5
2007    4.40%     0.00%       150.00%      10

Accounting For Obligations And Instruments Potentially To Be
Settled In The Company's Own Stock: We account for obligations and
instruments potentially to be settled in the Company's stock in
accordance with EITF Issue No. 00-19, Accounting for Derivative
Financial Instruments Indexed To, and Potentially Settled In a
Company's Own Stock. This issue addresses the initial balance sheet
classification and measurement of contracts that are indexed to,
and potentially settled in, the Company's own stock.

Under EITF Issue No. 00-19 contracts are initially classified as
equity or as either assets or liabilities, in the following
situations:

Equity

Contracts that require physical settlement or net-share settlement;
and Contracts that give the company a choice of net-cash settlement
or settlement in its own shares (physical settlement or net-share
settlement), assuming that all the criteria for equity
classification have been met.

Assets or Liabilities

Contracts that require net-cash settlement (including a requirement
to net-cash settle the contract if an event occurs and if that
event is outside the control of the company); and

Contracts that give the counterparty a choice of net-cash
settlement or settlement in shares (physical settlement or net-
share settlement).

All contracts are initially measured at fair value and subsequently
accounted for based on the current classification. Contracts
initially classified as equity do not recognize subsequent changes
in fair value as long as the contracts continue to be classified as
equity. For contracts classified as assets or liabilities, the
Company reports changes in fair value in earnings and discloses
these changes in the financial statements as long as the contracts
remain classified as assets or liabilities. If contracts classified
as assets or liabilities are ultimately settled in shares, any
previously reported gains or losses on those contracts continue to
be included in earnings. The classification of a contract is
reassessed at each balance sheet date.

In accordance with EITF Issue No. 00-19, a transaction which
includes a potential for net-cash settlement, including liquidated
damages, requires that derivative financial instruments, including
warrants and additional investment rights, initially be recorded at
fair value as an asset or liability and subsequent changes in fair
value be reflected in the statement of operations. The recorded
value of the liability for such derivatives can fluctuate
significantly based on fluctuations in the market value of the
underlying common stock of the issuer of the derivative
instruments, as well as in the volatility of the stock price during
the term used for observation and the remaining term.

Warrant Derivative Liabilities: We account for warrants issued in
connection with financing arrangements in accordance with EITF
Issue No. 00-19, Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Company's Own Stock.
Pursuant to EITF Issue No. 00-19, an evaluation of specifically
identified conditions is made to determine whether the fair value
of warrants issued is required be classified as a derivative
liability. The fair value of warrants classified as derivative
liabilities is adjusted for changes in fair value at each reporting
period, and the corresponding non-cash gain or loss is recorded in
current period earnings

Earnings per Common Share: Basic earnings per share is computed by
dividing income available to common shareholders (the numerator) by
the weighted-average number of common shares outstanding (the
denominator) for the period. Diluted earnings per share assumes
that any dilutive convertible securities outstanding were
converted, with related preferred stock dividend requirements and
outstanding common shares adjusted accordingly. It also assumes
that outstanding common shares were increased by shares issuable
upon exercise of those stock options for which market price exceeds
the exercise price, less shares which could have been purchased by
us with the related proceeds. In periods of losses, diluted loss
per share is computed on the same basis as basic loss per share as
the inclusion of any other potential shares outstanding would be
anti-dilutive.

Income Taxes: We must make certain estimates and judgments in
determining income tax expense for financial statement purposes.
These estimates and judgments occur in the calculation of certain
tax assets and liabilities, which arise from differences in the
timing of recognition of revenue and expense for tax and financial
statement purposes.

Deferred income taxes are recorded in accordance with SFAS No. 109,
"Accounting for Income Taxes," or SFAS 109. Under SFAS No. 109,
deferred tax assets and liabilities are determined based on the
differences between financial reporting and the tax basis of assets
and liabilities using the tax rates and laws in effect when the
differences are expected to reverse. SFAS 109 provides for the
recognition of deferred tax assets if realization of such assets is
more likely than not to occur. Realization of our net deferred tax
assets is dependent upon our generating sufficient taxable income
in future years in appropriate tax jurisdictions to realize benefit
from the reversal of temporary differences and from net operating
loss, or NOL, carryforwards.

We have determined it more likely than not that these timing
differences will not materialize and have provided a valuation
allowance against substantially all of our net deferred tax asset.
Management will continue to evaluate the realizability of the
deferred tax asset and its related valuation allowance. If our
assessment of the deferred tax assets or the corresponding
valuation allowance were to change, we would record the related
adjustment to income during the period in which we make the
determination. Our tax rate may also vary based on our results and
the mix of income or loss in domestic and foreign tax jurisdictions
in which we operate.

In addition, the calculation of our tax liabilities involves
dealing with uncertainties in the application of complex tax
regulations. We recognize liabilities for anticipated tax audit
issues in the U.S. and other tax jurisdictions based on our
estimate of whether, and to the extent to which, additional taxes
will be due. If we ultimately determine that payment of these
amounts is unnecessary, we will reverse the liability and recognize
a tax benefit during the period in which we determine that the
liability is no longer necessary. We will record an additional
charge in our provision for taxes in the period in which we
determine that the recorded tax liability is less than we expect
the ultimate assessment to be.

Recent Accounting Pronouncements:

In February 2007, FASB issued FASB Statement No. 159, The Fair
Value Option for Financial Assets and Financial Liabilities. FAS
159 is effective for fiscal years beginning after November 15,
2007. Early adoption is permitted subject to specific requirements
outlined in the new Statement. The new Statement allows entities to
choose, at specified election dates, to measure eligible financial
assets and liabilities at fair value that are not otherwise
required to be measured at fair value. If a company elects the fair
value option for an eligible item, changes in that item's fair
value in subsequent reporting periods must be recognized in current
earnings. FAS 159 also establishes presentation and
disclosure requirements designed to draw comparison between
entities that elect different measurement attributes for similar
assets and liabilities.

In December 2007, the FASB issued SFAS No. 141(R), "Business
Combinations". This Statement replaces SFAS No. 141, Business
Combinations. This Statement retains the fundamental requirements
in Statement 141 that the acquisition method of accounting (which
Statement 141 called the purchase method) be used for all business
combinations and for an acquirer to be identified for each business
combination. This Statement also establishes principles and
requirements for how the acquirer: a) recognizes and measures in
its financial statements the identifiable assets acquired, the
liabilities assumed, and any noncontrolling interest in the
acquiree; b) recognizes and measures the goodwill acquired in the
business combination or a gain from a bargain purchase and c)
determines what information to disclose to enable users of the
financial statements to evaluate the nature and financial effects
of the business combination. SFAS No. 141(R) will apply
prospectively to business combinations for which the acquisition
date is on or after Company's fiscal year beginning October 1,
2009. While the Company has not yet evaluated this statement for
the impact, if any, that SFAS No. 141(R) will have on its
consolidated financial statements, the Company will be required to
expense costs related to any acquisitions after September 30, 2009.

<PAGE>
<PAGE>
BALTIA AIR LINES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006

1. Organization and Operations

The Company was formed as a U.S. airline on August 24, 1989 in the
State of New York. Our objective is to provide scheduled air
transportation from the U.S. to Russia, the Baltic States and
Ukraine.  In 1991, the Department of Transportation (DOT) granted
the Company routes to provide non-stop passenger, cargo and mail
service from JFK to St. Petersburg and from JFK to Riga, with
online service to Minsk, Kiev and Tbilisi as well as back up
service to Moscow. We have two registered trademarks "BALTIA" and
"VOYAGER CLASS," and five trademarks subject to registration. Our
activities to date have been devoted principally to raising
capital, obtaining route authority and approval from the DOT and
the FAA, training crews, and conducting market research to develop
the Company's marketing strategy.

Regulatory Compliance

We intend to operate as a Part 121 carrier, a heavy jet operator.
As such, following certification we will be required to maintain
our air carrier standards as prescribed by DOT and FAA regulation
and as specified in the FAA approved Company manuals.  As part of
its regulatory compliance we will be required to submit periodic
reports of our operations to the DOT.

2. Property and Equipment

A summary of property & equipment is as follows:

                           Estimated
                           useful
                           life                      2007          2006
Operations manuals         5-7 years              $28,109        $28,109
Office equipment                                   42,392         35,155
Automobile                                         44,566              0
Less accumulated
depreciation                                      (65,383)       (60,735)
Net                                               $49,684         $2,529
Depreciation
   expense                                         $4,648        $12,808

3. Long-term debt
                                                    2007         2006
72 month note payable in monthly
installments of $ 728 including
interest at 8.49% secured by an
automobile                                        $19,368             $0
Total                                              19,368              0

Less current portion                               (7,000)             0

Due after one year                                $12,368              0

5 year maturities are as follows:

     2008             7,000
     2009             8,000
     2010             4,368
                    $19,368


4. Stockholders' Equity

Description of Securities

Common Stock: We have been authorized 500,000,000 shares of Common
Stock at $.0001 par value per share. As of December 31, 2007, a
total of 279,450,534 shares of Common Stock were issued and
outstanding and held by over 100 shareholders. In addition, we have
granted warrants to issue up to approximately 97,000,000 more
shares of our common stock. Holders of Common Stock are entitled to
receive dividends, when and if declared by the board of directors,
subject to prior rights of holders of any Preferred Stock then
outstanding and to share ratably in the net assets of the company
upon liquidation.  Holders of Common Stock do not have preemptive
or other rights to subscribe for additional shares. The Certificate
of Incorporation does not provide for cumulative voting.  Shares of
Common Stock have equal voting, dividend, liquidation and other
rights, and have no preference, exchange or appraisal rights.

Preferred Stock:  We are authorized to issue up to a maximum of 2
million shares (66,500 shares outstanding) of Preferred   Stock.
We can issue these shares as our board of directors shall from time
to time fix by resolution. Our Preferred Stock is not entitled to
share in any dividends declared on the Common Stock and has no
voting rights. Each share is convertible in to 3 shares of Common.
The liquidation preference is set by this conversion formula and
results in a pro rata claim on the Company's assets based upon the
underlying common shares issuable (199,500) upon conversion.

Recent Issuance of Unregistered Securities

2007:

Stock Issued for Cash
We issued 60,670,637 shares of our common stock in exchange for
receiving a total of $2,631,504 in cash.  The shares are not
registered and subject to restrictions as to transferability.

Stock Issued for Services
We issued 38,384,968 shares of our common stock in exchange for
services.  The shares were valued at $3,025,268 or about $0.08 per
share which reflected the weighted average market value at the time
of issuance. The shares are not registered and are subject to
restrictions as to transferability.

Stock Issued Due to Exercise of Warrants & Options
During 2007 holders of 58,000,000 warrants exercised their option
to acquire a like amount of shares of Common Stock. The options
were at various exercise prices. The exercise price was offset
against accrued compensation of $245,500.

2006:

Stock Issued for Cash
We issued 13,550,000 shares of our common stock in exchange for
receiving a total of $99,410 in cash.  The shares are not
registered and subject to restrictions as to transferability.

Stock Issued for Services
We issued 19,546,900 shares of our common stock in exchange for
services.  The shares were valued at $943,168 or about $0.05 per
share which reflected the weighted average market value at the time
of issuance. The shares are not registered and are subject to
restrictions as to transferability. We also issued 75,000 shares to
correct a prior issuance and cancelled 1,370,000 shares issued in
error in a previous fiscal year.

Stock Issued Due to Exercise of Warrants & Options
During 2006 holders of 22,000,000 warrants, registered in our 1999
registration statement, exercised their option to acquire a like
amount of shares of Common Stock. The options were at various
exercise prices and resulted in proceeds of $11,200.

Summary of Option and Warrant Activity

The following table provides summary information on the various
warrants issued by our company in private placement transactions
and unapproved equity compensation plans; the warrants exercised to
date; the warrants that are presently exercisable and the current
exercise prices of such warrants.



<TABLE>
<CAPTION>
                          2007                                             2006
                                      Weighted                      Weighted
                                   average exercise               average exercise
                        Shares         price         Shares           price
<S>                 <C>              <C>           <C>             <C>
Shares
outstanding
January 1              74,770,000     $0.0383       87,770,000      $0.0009

Granted during
year                   45,000,000     $0.0994        9,000,000      $0.2500

Exercised             (58,000,000)    $0.0800      (22,000,000)     $0.0001
Lapsed                          0     $0.0000                0

Outstanding at
December 31            61,770,000     $0.1154       74,770,000      $0.0383

Weighted average months
remaining                             47.2                          66.4


</TABLE>
The following table summarizes the status of the Company's
aggregate stock options as of December 31, 2007:
<TABLE>
<CAPTION>
                           Options Outstanding         Options Exercisable

                                   Weighted average   Weighted average              weighted
                                   exercise           remaining life                average exercise
     Grantee          Shares       price               in months        Shares      price
<S>                <C>            <C>                  <C>          <C>             <C>
Management &
Directors           13,150,000     $0.09                45.0          9,000,000      $0.25
Other               48,620,000     $0.10                47.8         48,620,000      $0.10

Total Shares        61,770,000                                       57,620,000

Intrinsic
Value               $1,422,218
</TABLE>


We granted approximately 44,000,000 warrants as part of the 2007
common stock offering. The warrants are exercisable for 3 years
from the date of grant at a strike price of $0.10. 9,000,000
options were granted in 2006 with a fair value of $0.0156 per
share. The outstanding options granted to management prior to 2006
vest upon the completion of the first revenue flight.

5. Income Taxes

The Company has approximately $9,000,000 in net operating loss
carryovers available to reduce future income taxes. These
carryovers expire at various dates through the year 2028. The
Company has adopted SFAS 109 which provides for the recognition of
a deferred tax asset based upon the value the loss carry-forwards
will have to reduce future income taxes and management's estimate
of the probability of the realization of these tax benefits. We
have determined it more likely than not that these timing
differences will not materialize and have provided a valuation
allowance against substantially all of our net deferred tax asset.
A summary of the deferred tax asset presented on the accompanying
balance sheets is as follows:

                                       2007                2006
Following is a summary of
the components giving rise
to the deferred tax provision.

  Currently payable:
     Federal                           $0                 $0
     State                              0                  0
     Foreign                            0                  0
Total currently payable                 0                  0
  Deferred:
     Federal                      154,000             90,000
     State                         23,000             13,000

Total deferred                    177,000            103,000

Less increase in allowance       (177,000)          (103,000)
Net deferred                            0                  0
Total income tax
    provision (benefit)                $0                 $0

                                        2007           2006
Individual components giving
rise to the deferred tax
assets are as follows::
Future tax benefit arising
from net operating
loss carry forwards              $3,885,000       $3,708,000
Less valuation allowance         (3,885,000)      (3,708,000)
Net deferred                             $0               $0


Utilization of federal and state NOL and tax credit carryforwards
may be subject to a substantial annual limitation due to the
ownership change limitations provided by the Internal Revenue Code
of 1986, as amended, and similar state provisions. The annual
limitation may result in the expiration of NOL and tax credit
carryforwards before full utilization.

6. Commitments and Contingencies

Facilities: The Company leases office space for its administrative
offices, under three month to month agreements, at a monthly rental
of approximately $4,600. 2007 expense was $55,200.

7. Supplementary Cash Flow Disclosure:

                                 2007             2006

Equity instruments issued
for services                $3,135,536         $1,081,127


8. Management's Plan of Operation

We believe we currently have sufficient capital to commence revenue
flight operations and to maintain our current level of operations.
However the final determination lies with the U.S. Department of
Transportation. During 2006 and into 2007 we continued to finance
our operations through the issuance of our common stock and the
continued exercise of warrants. Until revenue operations begin, our
monthly expenditures for administrative and regulatory compliance
can be controlled at about $30,000-$50,000. Based on current
reserves we have sufficient capital to support our development
stage operations through the end of 2008.

In 2007 we raised $2.9 mm in a private placement in order to start
revenue flight operations.  Based on our prior experience with
certification and current preparations the management believes that
the launch budget will be adequate to complete certification and to
commence flight service. Approximately $300,000 is budgeted for
aircraft, $450,000 for certification tasks, and $300,000 for
general and administrative expenses. At the time flight service is
inaugurated the company plans to have approximately 15 management
and 45 staff personnel.

Management has considered the overall pipeline effect that enhances
the initial cash position of a startup carrier. It is the industry
practice for passengers to purchase tickets in advance of their
flights while service vendors bill the carrier later.

In order that a new airline would not fly empty on day one,
approximately 30 days prior to the expected inaugural date the
Company expects the DOT to authorizes sales of tickets and cargo.
Such funds from advance sales, estimated at approximately $3 mm for
the company, accumulate in an escrow account, and are released upon
the issuance of the air carrier certificate.

There can be no assurance that additional financing will be
available on terms favorable to us or at all.  If adequate funds
are not available or are not available on acceptable terms, we may
not be able to fund expansion.

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 8A(T)   CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.  As of the end of
the period covered by this report, we conducted an evaluation under
the supervision and with the participation of our chief executive
officer and chief financial officer of our disclosure controls and
procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the
Exchange Act). Based upon this evaluation, our chief executive
officer and chief financial officer concluded that our disclosure
controls and procedures are effective to ensure that information
required to be disclosed by us in the reports that we file or
submit under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission's
rules and forms.

Management's Annual Report on Internal Control over Financial
Reporting. Our management is responsible for establishing and
maintaining adequate internal control over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act). Our internal
control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes of accounting principles generally accepted in the United
States.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Therefore, even
those systems determined to be effective can provide only reasonable
assurance of achieving their control objectives.

Our management evaluated the effectiveness of our internal control
over financial reporting as of December 31, 2007. In making this
assessment, our management used the COSO framework, an integrated
framework for the evaluation of internal controls issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
Based on this evaluation, our management concluded that, as of
December 31, 2007, our internal control over financial reporting was
effective.

This annual report does not include an attestation report of our
registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to
attestation by our registered public accounting firm pursuant to
temporary rules of the SEC that permit the company to provide only
management's report in this annual report.


Changes in Internal Control Over Financial Reporting.   There was no
change in our internal controls or in other factors that could
affect these controls during our last fiscal quarter that has
materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting. While existing
controls may be adequate at present, upon the commencement of flight
revenue service we intend to implement controls appropriate for
airline operations.

ITEM 8B OTHER INFORMATION.

None.

PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
          CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH
SECTION 16(a)
          OF THE EXCHANGE ACT

MANAGEMENT

Executive Officers and Directors

<TABLE>
<CAPTION>
The following table summarizes certain information with respect
to the executive officers and directors of the board <FN1>:

Name                     Age   Position
<S>                     <C>   <C>
Igor Dmitrowsky . . . .  53    President, CEO, CFO, Chairman of the
Board
Russell Thal . . . . .   73    Executive Vice President
Barry Clare . . . . . .  48    Vice President Finance
Walter Kaplinsky  . . .  70    Secretary, Director
Andris Rukmanis . . . .  46    V.P. Europe and Director

<FN>
<FN1>
</FN>
</TABLE>
Our directors serve until the next annual meeting and until their
successors are elected and qualified. Our officers are appointed to
serve for one year until the meeting of the board of directors
following the annual meeting of stockholders and until their
successors have been elected and qualified. There are no family
relationships between any of our directors or officers.

Igor Dmitrowsky, President, Chief Executive Officer and CFO,
founded the Company and served as Chairman of the Board from its
inception in August 24, 1989 to date. Mr. Dmitrowsky, a US citizen,
born in Riga, Latvia, attended the State University of
Latvia from 1972 to 1974 and Queens College from 1976 through 1979.
In 1979, he founded American Kefir Corporation, a dairy
distribution company, which completed a public offering in 1986,
and from which he retired in 1987.  Mr. Dmitrowsky has financed
aircraft and automotive projects, speaks fluent Latvian and
Russian, and
has traveled extensively in the republics of the former Soviet
Union.  In 1990, he testified before the House Aviation
Subcommittee on the implementation of United States' aviation
authorities by US airlines.

Russell Thal, a US citizen, is the Company's Executive Vice
President. Mr. Thal joined the Company in 2000. From 1981 to 2000
he was Chairman of Compuflight, Inc., an airline flight planning
firm. From 1980 to 1981 he was Director of Stations for New York
Air.

Barry Clare, a US citizen, is the Company's Vice President of
Finance.  Mr. Clare joined the Company in 2006.   Mr. Clare has
been instrumental in helping finance the Company From 2001 to 2004
has was Chief Operating Officer for Advance Plant Pharmaceuticals,
Inc.  From 1995 to 1997 Mr. Clare served as vice president of
Intermediaries, Inc., an investment banking firm.

Walter Kaplinsky, a US citizen, has been with the Company since
1990.  Mr. Kaplinsky has been corporate secretary since 1993. In
1979, together with Mr. Dmitrowsky, Mr. Kaplinsky was one of the
co-founders of American Kefir Corporation, where from 1979
through 1982, Mr. Kaplinsky served as secretary and vice president.

Andris Rukmanis, a citizen of Latvia, is the Company's Vice
President in Europe.  Mr. Rukmanis joined the Company in 1989. In
Latvia, Mr. Rukmanis has worked as an attorney specializing in
business law.  From 1988 through 1989, he was Senior Legal Counsel
for the Town of Adazhi in Riga County, Latvia.  From 1989 to 1990,
he served as Deputy Mayor of Adazhi.

Code of Ethics

We have not adopted a Code of Ethics that applies to all of our
directors, officers and employees, including our principal
executive officer, principal financial officer and principal
accounting officer. We intend to adopt a Code of Ethics shortly
after the filing of this Form 10-KSB.

Committees of the Board of Directors

As of December 31, 2007, we do not have any committees of our board
of directors.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT, AS AMENDED.

Based solely upon our review of copies of Forms 3, 4 and 5, and any
subsequent amendments thereto, furnished to the Company by our
directors, officers and beneficial owners of more than ten percent
of our common stock, we are not aware of any our directors,
officers or beneficial owners of more than ten percent of our
common stock that, during our fiscal year ended December 31, 2007,
failed to file on a timely basis reports required by Section 16(a)
of the Securities Exchange Act of 1934.

Item 10.  Executive Compensation.

No compensation has been paid to our executive officers during the
fiscal years ended December 31, 2007, 2006 and 2005.

During the fiscal year ended December 31, 2007, no options were
granted to executive officers.

During the fiscal year ended December 31, 2007, 50,000,000 common
stock options were exercised by Igor Dmitrowsky.

EMPLOYMENT AGREEMENTS

The Company has no individual employment agreements in place with
any of its executive officers or employees.

Future Compensation of Executive Officers

The board of directors approves salaries for the Company's
executive officers as well as the Company's overall salary
structure.  For year one following the closing of financing
sufficient to commence flight operations, the rate of compensation
for the Company's executive officers is expected to be:(i)
President $196,000, Executive Vice President $120,000, Vice
President Finance $110,000, (ii) Vice President Marketing
$90,000,and (iii) Vice President Europe $68,000.  To this date, the
Company has paid officers no salaries. Board directors are not
presently compensated and shall receive no compensation prior to
commencement of revenue service.

Item 11.  Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.

<CAPTION>

As of March 29, 2008, there were 297,239,159 shares of common
stock, par value $0.0001 outstanding.  The following table sets
forth, as of December 31, 2007, the ownership of the Company's
Common Stock by (i)each director and officers of the Company, (ii)
all executive officers and directors of the Company as a group, and
(iii) all other persons known to the Company to own more than 5% of
the Company's Common Stock.  Each person named in the table has or
shares voting and investment power with respect to all shares shown
as beneficially owned by such person.
<TABLE>
                               Common Shares
                            Beneficially Owned    Percent of Total
Outstanding
 Directors and Officers

<S>                                <C>                 <C>
Igor Dmitrowsky . . . . . .        84,422,825           30.20%
63-26 Saunders St., Suite 7I
Rego Park, NY 11374

Russell Thal . . . . . . . .       400,000          0.14%
26 Ridge Drive
Port Washington, NY 11050

Barry Clare . . . . . . . .           13,600,000            4.86%
16 Birchwood Park Court
Jericho, NY 11753

Walter Kaplinsky  . . . . .          6,717,294            2.40%
2000 Quentin Rd.
Brooklyn, NY 11229

Andris Rukmanis . . . . . .          1,118,750            0.40%
Kundzinsala, 8 Linija 9.
Riga, Latvia LV-1005

Shares of all directors and             106,258,869            44.63%
executive officers as a
group (5 persons)

Beneficial owners

Steffanie J. Lewis . . . . .          9,623,331           3.44%
3511 North 13th St.
Arlington, VA 22201

* Less than 1%

</TABLE>

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

None.

Item 13. EXHIBITS.

3.1 Certificate of Incorporation of Baltia Air Lines, Inc.
(incorporated by reference to Exhibit 3.1 to Form 10-KSB filed on May
19, 2005)

3.2 Bylaws of Baltia Air Lines, Inc. (incorporated by reference to
Exhibit 3.2 to Form S-8 filed on December 19, 2001).

23 Consent of Michael F. Cronin, CPA

31.1 Certification by Chief Executive Officer and Chief Financial
Officer pursuant to Sarbanes-Oxley Section 302, provided herewith.

32.1 Certification by Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S. C. Section 1350, provided herewith.

ITEM 14.     Principal Accountant Fees and Services

In 2007, the Company paid its present independent
accountant $4,000 for services in providing an audit of
the year 2006.  In 2008, the Company paid its present
independent Accountant $8,000 for services in providing
an audit of the year 2007. All other Company accounting
and tax preparations have been done in house.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Baltia Air Lines, Inc.

Date: 04-11-2008

/s/ Igor Dmitrowsky
By: Igor Dmitrowsky, President, CEO and CFO

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.

     SIGNATURE TITLE          DATE

/s/ Igor Dmitrowsky      Chairman, CEO and CFO    April 11, 2008
Igor Dmitrowsky               (Principal Executive Officer
                         and Principal Accounting Officer)

/s/ Walter Kaplinsky     Secretary and Director   April 11, 2008
Walter Kaplinsky

/s/ Andris Rukmanis      V.P. Europe and Director April 11, 2008
Andris Rukmanis

Exhibit 31.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Igor Dmitrowsky, the Chief Executive Officer and Chief
Financial Officer of Baltia Air Lines, Inc., certify that:

1. I have reviewed this annual report on Form 10-KSB of Baltia
Air Lines, Inc.;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the small business issuer as of, and
for, the periods presented in this report;

4. The small business issuer's other certifying officer(s) and I
are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-
15(e) and 15d-15(e)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
small business issuer, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure
controls and procedures, and evaluated the effectiveness of our
internal control over financial reporting, and printed in this
report our conclusions about the effectiveness of our internal
control over financial reporting, as of the end of the period
covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business
issuer's internal control over financial reporting that occurred
during the small business issuer's most recent fiscal quarter
(the small business issuer's fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably
likely to materially affect, the small business issuer's internal
control over financial reporting; and

5. The small business issuer's other certifying officer(s) and I
have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the small business issuer's
auditors and the audit committee of the small business issuer's
board of directors (or persons performing the equivalent
functions):

(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the small
business issuer's ability to record, process, summarize and
report financial information; and

(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the small
business issuer's internal control over financial reporting.

Date: April 11, 2008

/s/ Igor Dmitrowsky
Igor Dmitrowsky
Chief Executive Officer and Chief Financial Officer
(principal accounting officer)

EXHIBIT 32.1

BALTIA AIR LINES, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report Baltia Air Lines, Inc.
(the "Company") on Form 10-KSB for the period ended December 31,
2006 as filed with the Securities and Exchange Commission on the
date hereof (the Report), I, Igor Dmitrowsky, Chief Executive
Officer and Chief Financial Officer (principal accounting
officer) of the Company, certify, pursuant to 18 U.S.C. ss.1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:

(1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.

A signed original of this written statement required by Section
906 has been provided to Baltia Air Lines, Inc. and will be
retained by Baltia Air Lines, Inc. and furnished to the
Securities and Exchange Commission or its staff upon request.

Date: April 11, 2008

/s/ Igor Dmitrowsky
Igor Dmitrowsky
Chief Executive Officer and Chief Financial Officer
(principal accounting officer)